12 August 2008

NSG draft waiver for India covers all nuclear, 'dual use' items

The draft waiver the United States has circulated to enable India to access items from the Nuclear Suppliers Group certainly fits the description of "clean and unconditional", for now at least. There are no extraneous conditions or demands and India is not being asked to do anything it has not already committed itself to in July 2005. But it is clear that attempts are being made behind the scenes to introduce qualifications and conditions during the NSG consultation process scheduled for Vienna on August 21. The fun and games have only just begun....

New Delhi: The Nuclear Suppliers Group draft rule change circulated by the U.S. last week links the waiving of the cartel’s export restrictions for India to the non-proliferation commitments Prime Minister Manmohan Singh made in July 2005 and does not impose any extraneous conditions. However, with the U.S. being candid about the possibility of the draft undergoing substantial revision once the 45-nation group takes up the India exemption in Vienna on August 21, officials here are preparing for a tough fight ahead.

Despite an American proposal to that effect, the Indian side is not keen to “sit in” on the nuclear club’s deliberations as an “observer” or be called upon to bargain in any way with the group’s 44 other members. India does not want to be part of any NSG meeting unless it is part of the decision-making process, senior officials told The Hindu.

Instead, Foreign Secretary Shiv Shankar Menon and the Prime Minister’s Special Envoy, Shyam Saran, will travel to the Austrian capital to answer questions individual NSG members might have and generally drive home the point that the Prime Minister has no more wiggle room domestically. Indeed, if the U.S. is unable or unwilling to defend the proposed draft and ward off superfluous amendments, the United Progressive Alliance government will be under pressure to walk away.

The two-page draft finalised by the U.S. and India last week follows the structure of the version Washington had circulated in March 2006 but differs from it in certain crucial respects.

Gone is the paragraph calling on NSG members to strive for the earliest possible placement of all Indian nuclear facilities under international supervision. Gone also is the conditionality that had been built into the earlier draft, wherein nuclear sales were allowed so long as member states were satisfied India continued fully to meet its non-proliferation commitments. The proposed NSG exemption is still linked to India abiding by its commitments, but not in a way that could conceivably allow for immediate suspension of supplies in case an individual member believes India has reneged on its promises. Further, India’s adherence to future NSG guidelines has been qualified, albeit indirectly, by linking implementation to its participation in the decision-making process, and Indian access to dual-use items — regulated by Part 2 of the NSG’s guidelines — has now explicitly been brought in.

The draft guidelines do not exclude enrichment and reprocessing equipment. And they make no reference to a cut-off mechanism in case of any action by India, though there is a new reference to the maintenance of “contact and consultation” by NSG members “on matters connected with the implementation of the Guidelines taking into account relevant international commitments and bilateral agreements by India.” Pursuant to a perceived violation by India, any NSG member could invoke this clause to demand consultations, though suspension of the Indian waiver would presumably require a consensus decision.Potential wrinkle

The one area in the NSG draft where a potential wrinkle remains is in the paragraph clarifying India’s adherence to the group’s export guidelines.

In the July 2005 statement, the Prime Minister committed the country to “ensuring that the necessary steps have been taken to secure nuclear materials and technology through comprehensive export control legislation and through harmonisation and adherence to ... Nuclear Suppliers Group guidelines.” Though the commitment was clearly to the guidelines as they currently exist and not to any future amendments the NSG may introduce, India has had to fight a rearguard action to clarify that it will not be automatically bound by decisions to which it is not a party. Accordingly, the NSG draft rule change, which notes adherence to the club’s guidelines as one of India’s commitments, also requests the group’s chair to “review proposed amendments to the guidelines with all non-member adherents on a non-discriminatory basis and solicit such comments on the amendments” as these states may wish to make. The draft also stresses: “Participation of India in the decisions regarding proposed amendments will facilitate their implementation by India.”

Though this formulation falls short of granting India the same ‘veto’ rights as an NSG member — indeed New Delhi would ideally like to join the suppliers group but the U.S. and others are wary — Indian officials believe it sufficiently clarifies the fact that the country cannot be held responsible for non-adherence to future export guidelines the NSG may adopt without Indian concurrence.

This issue is considered important because India does not want the NSG to adopt guidelines that may negate the country’s commercial advantage as far as nuclear exports are concerned. Already, for example, some non-proliferation lobbyists want the NSG to ban the sale of pressurized heavy water reactors of the kind India has expertise in (along with Canada).

Voluntary commitments

The NSG draft begins by noting that the NSG members desire to contribute to an effective non-proliferation regime “and to the widest possible implementation of the objectives of the Treaty on the Non-Proliferation of Nuclear Weapons.”

This phrase, which was there in the original U.S. draft of 2006 as well, was considered unobjectionable by New Delhi since the objectives of the NPT are “the cessation of the nuclear arms race” and the undertaking of “effective measures in the direction of nuclear disarmament.”

The opening paragraph of the new draft also says that the NSG “wishes to pursue mechanisms to affect positively the non-proliferation commitments and actions of those countries outside the traditional nuclear non-proliferation regime” and limit the “further spread of nuclear weapons.”

In this respect, says the document circulated by the U.S., the NSG “welcomes India’s efforts with respect to ... [the six] non-proliferation commitments and actions” it has “taken voluntarily as a contributing partner to the non-proliferation regime.” These commitments, all drawn from the July 18, 2005 U.S.-India statement, are enumerated, including continuation of India’s unilateral moratorium on nuclear tests and its continuing adherence to NSG guidelines on nuclear exports.

The main change here compared to the 2006 draft is the inclusion of the word “voluntarily.” This has been done to dispel the impression that India’s bilateral commitments to the U.S. are now being “multi-lateralised” or made legally binding in any way.

After taking note of these non-proliferation commitments and actions, the proposed amendment says that “in view of the above,” the NSG has “adopted the following policy on civil nuclear cooperation by participating governments with the IAEA-safeguarded Indian civil nuclear facilities.” This policy is then spelt out in two sections.

First, it says that notwithstanding the requirement of full-scope safeguards in Part 1 of its guidelines (Infcirc/254(Rev. 9)), member states may transfer “trigger list items and/or related technology” for peaceful purposes for use in the country’s safeguarded civil nuclear facilities. The only proviso is that the other conditions specified in the rules — e.g. a commitment from the recipient state to not use the imported items for explosive use, acceptance of IAEA safeguards on those items, etc. — must be fulfilled.

Though Part 2 of the NSG’s guidelines advise “prudence” but do not prohibit the sale of dual-use items for use in India’s civil nuclear programme, the draft amendment explicitly seeks to enable Indian access to these items as well. If accepted, the new guideline will thus say that member states may transfer dual-use items to India notwithstanding the reference in the guidelines to absence of full-scope safeguards in the recipient country being a “relevant factor” to be taken into account in considering whether to authorise transfers.

It would be interesting to clearly know beforehand what technologies at different "stages" of the nuke agreement (like Hyde act, NSG agreement, US congress up-down vote) and various "actors" (like US, NSG countries ) will NOT be available to India. This will be the risk or the loss component associated with the give and take nature of this agreement. Right now everybody is dropping terms like nuclear fuel, reactors and reactor components, dual use items including enrichment and reprocessing tech., "sensitive" nuclear equipments. It is not yet clear what will NOT be traded.

What about the technology restrictions that may arise in future on specific components and technology due to intellectual property rights and trade secrets ? Though this is hard to predict at this stage but these "restricted" items will act as diminishing returns of the nuke deal.

There is also the question of export constraints and restrictions on indigenously developed technolgies and equipments used in safeguarded facilties. Can those indigenous innovations be protected in light of the intrustive safeguards ?

And forget about technolgies what does the deal say about movement of people from restricted to safeguarded facilties and vice versa ?